We retired our "Five Bull Market Barometers" in 2020 to make room for a new weekly post that's focused on the three most important charts for the week ahead.

This is that post, so let's jump into this week's edition.

The market breadth has definitely improved, but certain stocks are pushing higher on momentum, and we're here to identify just those! This week, we have a stock from the Financial Sector.

It's the weekly currency edition of What the FICC?

The forex and futures markets will provide bountiful ways to trade a weakening dollar.

But what's the best option?

Check it out!

From the desk of Steve Strazza @Sstrazza

We held our December Monthly Strategy Session last week. Premium Members can access and rewatch it here.

Non-members can get a quick recap of the call simply by reading this post each month.

By focusing on long-term, monthly charts, the idea is to take a step back and put things into the context of their structural trends. This is easily one of our most valuable exercises as it forces us to put aside the day-to-day noise and simply examine markets from a “big-picture” point of view.

With that as our backdrop, let’s dive right in and discuss three of the most important charts and/or themes from this month’s call.

From the Desk of Kimmy Sokoloff

November CPI came in better than expected, and the market was up over 2% at the open then drifted lower all morning.

The $SPY was up at 410 and dropped down to 399, roughly.

There was a lot of profit-taking, and a lot of good short ideas were out there to be had.

From the Desk of Ian Culley @IanCulley

The forex and futures markets will provide bountiful ways to trade a weakening dollar.

Unfortunately, some of our initial attempts to capitalize on dollar weakness have fallen flat. 

We’re not surprised – especially since market conditions remain challenging. But that won’t deter us from moving forward and finding the best trade setups.

As always, a viable trade comes down to two critical components: a well-defined risk level and a risk/reward profile heavily skewed in our favor.

And, of course, you know how much we like relative strength. 

That brings us to a vehicle that challenges the definition of "currency." 

That's gold.

From the desk of Willie Delwiche.

Portfolio Update: Precious metals have been showing signs of life relative to base metals for some time. For example, the trend in the copper/gold ratio has favored gold 40 weeks in a row. Silver has also gotten in on the action and with it holding above a key level last week, we are adding it to our Tactical Opportunity portfolio this week.

From the desk of Willie Delwiche.

The market’s focus is moving on from monthly inflation prints and toward the health & resiliency of the economy in light of the cumulative tightening by the Fed. Our macro health status report remains mixed, but is holding steady for now.

Why It Matters: Stocks celebrated the release of the November CPI report that showed inflation cooling more than expected. Those early gains have proven hard to hold on to. At this point, peak inflation is a rear-view issue and the path of inflation going forward is more important for the market. It is possible that it retreats quickly, but more plausible that after an initial pullback it stabilizes at a relatively high level. The sticky CPI (published by the Atlanta Fed) actually moved to a new high in November. As the market reckons with the path of inflation, the need for additional rate hikes and the impact on the economy of all this, our health status report will provide a timely assessment of the most important question...

We've adjusted a position in the Paid-to-Play portfolio today:

Have you heard the news?

Binance is the latest FTX!

Seriously, have you seen all the red flags?

It's insolvent, bro.

Just trust me, bro.

Alright, in all seriousness, there's been a fair amount of rumors surrounding Binance's solvency this week. This narrative originated from Binance's ambiguous proof-of-reserves and internal audits.

Following these questions, Binance saw a net outflow of $1.3B over the last few days, with many prominent trading firms withdrawing nine-figure amounts.

And Binance's public image has been under fire, with the company's official Twitter account leaking a private chat log featuring a crypto trader with over 280,000 followers.

&t=fR90RnxS-wMvfuZ9QTljWA

If I've learned anything about being involved with crypto, it's to verify, not trust.

It doesn't matter what CZ or Binance says. Everybody lies.

Follow the money: It's the only truth in all this noise. It's why we put a premium on price action. It's the only fact that matters.

Personally, I don't have any of my Bitcoin on exchanges. I don't trust them. If it's not your keys, it's not your crypto.

From the Desk of Kimmy Sokoloff

Futures are up big this morning. Now we'll see what the November CPI data brings this morning at 8:30 a.m. ET.

The $SPX futures are trading roughly at their 200-day moving average at 4,050.

The largest insider buy on today’s list comes in a Form 4 filing by Jeff Aronson.

Aronson revealed a purchase of roughly $1.2 million in GoHealth $GOCO.

It's that time of the year again.

The infamous Santa Claus rally is just around the corner.

And contrary to popular belief, it doesn't start until the end of next week.

The official period for the Santa Claus rally includes the last 5 trading days of the year and the first two of the following year.

Based on the 2022/2023 holiday schedule, that means this year's Santa Claus Rally begins on Friday December 23th and goes through Wednesday January 4th.

These 7 days have historically had a ridiculous track record, averaging over a 1.3% return for the S&P500 and coming in positive almost 80% of the time.

Since 1950, all other 7-day periods throughout the year only average 0.24% returns and were positive less than 60% of the time.

That's real alpha.

From the Desk of Kimmy Sokoloff

We're still range-bound, and tomorrow could potentially be a deciding factor on which way this market leads over the next few weeks.

$SPY is currently at 398, which is resistance.

From the desk of Steve Strazza @Sstrazza.

Welcome back to Under the Hood, where we'll cover all the action for the week ended December 9, 2022. This report is published bi-weekly and rotated with The Minor Leaguers.

What we do here is analyze the most popular stocks during the week and find opportunities to either join in and ride these momentum names higher, or fade the crowd and bet against them.

We use a variety of sources to generate the list of most popular names.

There are so many new data sources available that all we need to do is organize and curate them in a way that shows us exactly what we want: a list of stocks that are seeing an unusual increase in investor interest.

Click here for a behind-the-scenes look at our process.

Whether we’re measuring increasing interest based on large institutional purchases, unusual options activity, or...

From the Desk of Steve Strazza @sstrazza and Alfonso Depablos @Alfcharts

This is one of our favorite bottom-up scans: Follow the Flow.

In this note, we simply create a universe of stocks that experienced the most unusual options activity — either bullish or bearish, but not both.

We utilize options experts, both internally and through our partnership with The TradeXchange. Then, we dig through the level 2 details and do all the work upfront for our clients.

Our goal is to isolate only those options market splashes that represent levered and high-conviction, directional bets.

We also weed out hedging activity and ensure there are no offsetting trades that either neutralize or cap the risk on these unusual options trades.

What remains is a list of stocks that large financial institutions are putting big money behind.

And they’re doing so for one reason only: because they think...

From the desk of Steve Strazza @Sstrazza

Our Top 10 Charts Report was just published.

In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.

Running Out of Gas

After failing to hold a breakout to new all-time highs earlier this year, gasoline futures have fallen by roughly 50% in the past six months. Last week, both crude oil and gasoline continued their slide by taking out their 2018 highs. As long as energy futures are below these prior-cycle highs, we want to approach the entire sector with caution.

From the desk of Steve Strazza @Sstrazza

Check out this week's Momentum Report, our weekly summation of all the major indexes at a Macro, International, Sector, and Industry Group level.

By analyzing the short-term data in these reports, we get a more tactical view of the current state of markets. This information then helps us put near-term developments into the big picture context and provides insights regarding the structural trends at play.

Let's jump right into it with some of the major takeaways from this week's report:

* ASC Plus Members can access the Momentum Report by clicking the link at the bottom of this post.

Macro Universe:

• This week, our macro universe was negative, as 81% of our list closed lower with a median return of -1.44%.
• The Volatility Index $VIX was the winner, closing with a 19.78% gain.
• The biggest loser was Oil $CL, falling -11.20%.
• There was no change in the percentage of assets on our list within 5% of their 52-week highs – currently at 4%.
• 9% of our macro list made fresh 4-week highs and 6% made new 13-week highs....

The S&P 500 fell 3.4% last week, the 11th time this year that the index was down 3% (or more) in a single week. Only 2008 and 1974 had a larger number of such declines. Paired with the 9 times the S&P 500 has rallied 3% or more in a single week this year, 2022 has now moved ahead of 2009 and is only in third place (still behind 2008 and 1974) with 20 weekly swings of 3% or more in either direction.

More Context: Stock market strength and volatility have been inversely correlated for decades. Volatile years tend to be weak and quiet years tend to be strong. The decline in the S&P 500 last week alone was larger than the largest peak-to-trough decline experienced over all of 2017 (one of the quietest and most consistently strong years in stock market history). This year’s volatility has been accompanied by the smallest percentage of days with more new highs than new lows in more than 50 years. While we are seeing relative leadership shift, persistent strength remains elusive.      

In our ...

We've currently only got one delta-neutral "income" trade on the books right now, but that one will be coming off sometime this week as it is comprised of December options which expire this Friday.

In a perfect world, I always prefer to have a least some delta-neutral short premium exposure in the portfolio to help us compensate for any sideways chop that the markets might serve up to our existing directional bets. It's a a nice portfolio diversifier.

With this in mind, today's trade will be in an ETF that is currently trading smack-dab in the middle of a four month range that I expect will hold for a least a few more weeks.